2016 (12) TMI 484

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.... had constructed a commercial premises for renting of the same to various customers. For construction of such premises, appellant had availed various services on which Service Tax liability was discharged by the service provider and appellant availed CENVAT credit of the same; appellant had taken interest-free security deposit from various customer for giving space on rent; appellant forfeited the amount of advance given by the customers on relegation of the contract by the customer. Revenue authorities are of the view that appellant cannot avail CENVAT credit of various inputs services which are consumed for construction of the building, interest-free deposit and the forfeited amounts are liable to be tax under renting of immovable propert....

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....tual matrix on the various detailed submission made during the personal hearing. 4. Learned departmental representative reiterates the findings of the lower authorities.     5. On consideration of the submissions made by both sides and perusal of records, we find that the issue needs to be addressed individually and accordingly we do so. 5.1 As regards the denial of CENVAT credit of input and inputs services used in relation to the building of the property which was to be used by the appellant for the commercial purpose by leased out the area of such commercial property, we find that there is no dispute that the appellant had discharged the Service Tax liability on the amount received as rent from their clients. If a....

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....or, we do agree that Service Tax liability on such amount forfeited as liquidated damages does not arises. Similar issue came up before Hon'ble Apex Court in the case of United Breweries Ltd. (supra). In the said case United Breweries Ltd. (supra) the issue was of security deposit of the bottles which was not returned which was forfeited by the said Company. We find the ratio of the judgment can be applicable in the case in hand which is in paragraph 19 of the judgment which we respectfully reproduce. "We are unable to uphold this contention. Whether the bottles and the crates were sold along with the beer or not will depend upon the intention of the parties. We have set out the terms and conditions under which the beer was sol....